/ Food & Drink, Money, Shopping

Brits use credit and savings just to pay for food

A chip and pin card machine

Every month we publish new data, showing how different consumers are faring and feeling in the tough economic climate. This month, we identified how many households are struggling to pay for food.

Our latest Consumer Insight Tracker data found that five million UK households needed to use credit or savings to cover their spending on food last month.

That’s a huge number, so we looked deeper to find out who these people are. We discovered that many of them are low-income families, they’re likely to be financially vulnerable and are typically aged 30-49 years old with children. Nearly half of these families are on the lowest incomes, earning £21,000 or less per year.

With food prices rising in the last year, it isn’t surprising that shoppers tell us that the cost of food is one of their top three worries. Eight in 10 of the struggling households say they’re worried about food prices. More than half say they plan to cut back spending on food in the coming months. However, others feel they’re not able to cut back when trying to feed their households.

Using savings to pay for food

I was shocked by these findings. I didn’t realise so many people can’t afford to cover their monthly food bill. And as well as using credit and savings to cover their spending, it seems struggling households are resorting to all sorts of means to get by and put food on the table. A third of them borrowed money from family or friends, while more than one in 10 defaulted on a bill last month.

While they use more credit and whittle down their savings, I’m not surprised that two thirds of these households are worried about their savings levels and the same proportion are worried about their levels of debt.

The food budgeting challenge

I’ve had a look into how much people typically spend on their food bills – around £76 a week on average. Yet, in the last year food prices have risen by around 4% – something has to give.

I do most of my food shopping online and, to save money, always check the special offers to see what deals I can get. Although, sometimes it means we eat the same thing for a few days just because it’s reduced! I’ve also discovered a great fruit and veg stall at our local market that’s much cheaper than going to the supermarket.

In a previous Conversation, DiB shared a tip for making your food budget go further, while acknowledging that it’s not always an easy tip to follow:

‘In the present economic climate many shoppers go for the cheap option rather than value. I found that buying better quality means I buy less, waste less, and it goes further. But then when I’m faced with what’s in my purse at the time the better quality product often stays on the shelf.’

What action have you taken to make ends meet and cover food bills? How have you noticed the impact of increased food prices on your monthly spending?

Em says:
5 May 2013

I’m not sure how anyone can make that inference, unless the household has no income at all.

The basic needs of any human are: food and water, then shelter and clothing. After that, sanitation, education, healthcare, transportation, etc.

So expenditure of £22,000 and income of £21,000 means there is a £1,000 shortfall in my budget. If I draw on my savings, or use my credit card in the supermarket to help with the shortfall, it does not mean I cannot afford to buy the most essential of human needs – food – even though I might choose to view it that way.

It probably means most of my income has gone towards paying what are seen as non-deferrable expenses – mortgage interest or rent, heating, transport to get to work, etc. And possibly optional expenditure, such as consumer durables, other transport, entertainment, and some clothing.

By focusing on food in this somewhat sensationalist way, other areas where government policy could make a bigger difference to the cost of life’s basic needs get ignored:

The UK requires cheaper, better quality and more efficient housing. The high cost of housing in this country is largely the result of planning controls and an industry cartel that has flourished on the back of it.

Lower domestic energy costs – don’t forget there is an extra 5% government tax (VAT) on all heating and lighting.

Public transport in the UK is expensive compared to many other countries.

The high cost of water and sanitation.

Michael Howe says:
5 May 2013

I wonder if this survey took into account expenditures on such things as payments for satellite television, tickets for football clubs upgrading to new cars, larger televisions etc. when these items are not really necessary.

Em says:
5 May 2013

Hmm. Not only the conclusion, but the methodology to arrive at this conclusion seems flawed:

“Populus, on behalf of Which?, interviewed 2,078 UK adults **ONLINE** between 15 and 17 March 2013.”

I don’t know about anyone else here, but if I had to choose between paying my food bill and my ISP bill, I know which one I would do without!

I would be very interested to see the actual credit card statement and weekly shopping bills of one of these consumers. Perhaps you could run a Convo on this and we can come up with other helpful money-saving tips – apart from how to economise on food.

Nick Weeks says:
5 May 2013

I’m sure plenty of posters have a lot to feel smug about, but the reality for many people is that there just isn’t enough cash for energy and food. If you’re on benefits, Some kind of phone and internet connection are essential, especially if you’re looking for work. Many of those unexpectedly out of work will have long-term contracts (for example, Sky or gymn subscriptions) that can take a year to cancel, so these aren’t always luxuries that can be controlled! I know – it took me eight months to work through such items when I lost my last job.

Before posting smug condemnations of the feckless poor, please stop and think. If you lost your job or became too disabled to work tomorrow (or if both of you did, if you’re in a two-income household), how .long would it take you to set yourself up to live on the dole? What would you do if the fridge or boiler broke? How long would it take before you were able to grow even basic salads to cut down on food costs – what’s the waiting time for an allotment if you don’t have a garden?

The lecturing and patronising approach that some people take to the very real problems of poverty is a real contributor to the marginalisation that many of us feel.

Em says:
5 May 2013

If you are looking for “smug”, I suggest you check out the opinions expressed in the 400 or so comments on the BBC report about this artice.

I am simply trying to question, in as non-judgemental way as I can, whether the results of this “survey” are valid, the methodology is sound and whether it does anything to help those who live in real poverty by reporting these findings in a sensationalist way. This seems to be more about inappropriate financial management and life-style choices, not circumstance.

My grandmother was widowed in WWI and brought up 9 children. She grew vegetables, had chickens, the occasional pig or cow, even into her 90’s when she lived on her own. She did not have a credit card nor any other debts I was aware of. According to my mother, there was always food on the table when she was a girl, if not much else.

And yes, I have been unemployed for several months and lived off my savings, as I did not believe it right to rely on State benefits if I didn’t have to. There are 2.5 million unemployed in the UK, but Which? is reporting that 5 million households are buying food on credit. 50% of those households must be doing something wrong.

Heather Owen says:
18 May 2013

I agree with all your comments completely! I was diagnosed with angina and a hiatus hernia in Sep 2012 at the age of 60 and was put on sick pay of £73 per week! First time ever after having paid tax and national insurance for 44 years!,,Funds soon went downhill all the way and I have never been out of my overdraft zone since! Technically I should have been on a pension at 60 but recent government changes had put paid to that. I have recently had the Atos medical to decide if I am fit to return to work (on strong medication, limited capability etc) their questions do not relate to your illness whatsoever but whether you can make a meal, walk short distances, wet the bed, etc etc, very basic stuff that many people although tired every day with their various chronic illnesses and medications can still do for themselves. I have already lost my job as I am at risk driving and operating machinery so it will be interesting to see the outcome of the medical! Please don’t tar us all as scroungers or put us in call centres.

Socratic Elenchus says:
5 May 2013

What about those who use credit cards for cashback?

M.D. says:
5 May 2013

Plenty of people like myself use the Santander 123 credit card because it actually saves me money
on my purchases including Food, clothing ,petrol and Direct Debits for Gas Electricity, council Tax etc, so your survey is not accurate.